An agreement, in principle at least, between the government and Greece’s lenders to provide relief from rising interest rates and surging inflation to at-risk households and responsible borrowers was reportedly reached on Thursday.
The conservative Mitsotakis government has signaled its intent over the recent period to pressure Greece’s banking sector, mainly the four thrice-bailed-out systemic banks, into providing relief measures to borrowers – especially those paying off mortgages for primary residences.
Reports of an agreement to create a “support mechanism” emerged immediately after the end of a meeting at the finance ministry in Athens between relevant Minister Christos Staikouras and representatives of banks.
While no details have officially emerged, market sources cited an initiative to facilitate a decrease in monthly payments for borrowers meeting specific and strict criteria.
The same sources said the cost of such an initiative-cum mechanism will be covered by both the state and banks themselves, essentially a through a possible subsidization of a portion of increased interest rates. Another proposal cited involves the extension of mortgages’ maturity, a refinancing tool that Greek banks have employed extensively over the past decade. The latter, however, while reducing monthly payments means a homeowner will pay more for the property when the entire loan is paid off, if interest rates are not commensurately cut.
Any such subsidy program or mechanism will be exclusively geared towards mortgages for primary residences.
Both sides, the Greek government and banks, have a keen interest in achieving some sort of arrangement to the benefit of borrowers, with the former eager to avoid public discontent on the economic front heading into an election year in 2023.
Lenders, on the other hand, do not want to see a new generation of serviced or restructured loans to “go red” and be shifted to the NPE column on their spreadsheets.
Latest News
FT: Greece’s Economic Rebound a Balance of Growth and Poverty
Eurostat data revealed a significant 10.8% drop in Greek public debt relative to GDP in 2023, alongside a 2% economic expansion, outpacing Germany's performance.
Lavrio Port Authority Next Up for Privatization
A deadline for the submission of expressions of interest is May 14, 2024
Eurostat: Greece Records Largest Drop in Natural Gas Prices in 2nd Half of 2023
The price of electricity and natural gas in Europe was down following a substantial surge that began before the Russian invasion of Ukraine and peaked in 2022
GEK TERNA Still Considers Leveraging Concessions Portfolio as Financial Tool
President and CEO of Gek Terna George Peristeris explained the company's plans on Tuesday on the sidelines of the inauguration of sections of Greece's E65 highway
NielsenIQ: 3% Supermarket Revenue Increase in Q1
Private label products are gaining traction, comprising 25.4% of shopping basket shares, up from 24.7%
Store Hours Change Today in Observation of Orthodox Easter
The President of the Athens Chamber of Commerce hopes the Easter period will provide a much-needed boost to retail traffic in the capital
Athens-area Mass Transit Systems Set to Finally Install Contact-less Fare Payment
Paying fares via bank cards, smartphones and smartwatches in all mass transit systems in the Greek capital, namely, buses, trolleys, the metro and tram lines, is scheduled by the end of the year
Council of State Rejects Motion Against Thessaloniki Motorway Project
The motion was filed earlier this month by three local citizens’ and environmental groups and generated a high court decision for a temporary stay in construction
Greek 30Y Bond Issue Oversubscribed by 11 Times
Very high demand pushed down the coupon's interest rate to 4.125%
Athens Int’l Airport Wins Top Prize at Routes Europe Awards
The Routes business is focused entirely on aviation route development and the company's portfolio includes events, media and online businesses